Jobs Homes Autos For Sale










Columnist
What is the job of an association officer?
By Jordan Shifrin | Daily Herald Columnist
print story
email story
Published: 10/2/2009 12:04 AM

Send To:

E-mail:
To:

From:

Name:
E-mail:

Comments:

It is not uncommon to hear an owner or a director complain because another officer of the board did this or did not do that. The role of each officer is limited by the scope of that authority defined by their particular title in the bylaws and defined by statute. Anything else must be an express grant of authority by a majority vote of the board.

For example, the Illinois Condominium Property Act defines the president's job as presiding over the meetings, the secretary keeps the minutes of all meetings and the treasurer keeps the financial records and books of account.

The Illinois General Not For Profit Corporation Act defers to the bylaws as to the role of each officer and neither statute even recognizes the existence of a vice president. However, we all know of situations where the president is doing a lot more than that.

Unless an association has precisely defined duties set forth in its bylaws, all of the responsibilities of the officers are within the discretion of the board as a whole. Specifically, no director or officer has any greater authority than any other, except that which is specifically granted by a majority vote of the board. These situations leave a lot of room for conjecture and overreaching.

Over the years, conventional wisdom, combined with custom and usage have carved out certain areas of responsibility for each officer.

President: The president is the chief executive officer of the association. In addition to "presiding over meetings," the president usually has signatory authority on checks and contracts. The president is generally the contact person for outside parties. The president should define the annual goals and objectives for the association and set the agenda for each meeting. The president should appoint committee members, subject to the advice and consent of the board. The president should be the liaison with the manager, lawyer, accountant and other professionals working with the association. Lastly, the president is the leader of the association and should proactively seek out and recruit future committee members, directors and officers.

The president should not be supervising contractors, making decisions without board approval, writing up rule violators or committing the association to spend money not previously authorized by the board.

Vice president: Most associations have a vice president, even though there is no statutory requirement. Many association bylaws, however, do provide for one. The vice president is primarily responsible for substituting for the president in his or her absence. Sometimes the vice president is appointed to chair a committee or supervises all of the committees and reports their activities to the board. Generally, the vice president has no defined role unless the board expands the scope of the job.

Secretary: The secretary is the keeper of the minutes, though not necessarily the "taker" of the minutes. As often happens, the lone female on a board will get coerced into taking minutes and become the secretary. However, the "corporate" secretary is the keeper of the records and the seal. The secretary attests to the other officers' signatures on legal documents. A number of the secretarial duties are delegated to the property manager, such as maintaining the books, keeping member lists up to date, sending out correspondence, etc. Many associations employ a stenographer or a volunteer to record the minutes as opposed to the board secretary. Again, it is up to the board to define the secretary's role beyond keeping copies of all minutes of the board and a list of the owners.

Treasurer: The primary functions of the treasurer are generally incorporated into most professional management contracts. When this occurs, the treasurer's role can be largely ceremonial or they can take an active role in different areas. The treasurer can be the "chief financial officer" of the association; signing checks, heading the budget committee, act as the liaison to the auditor, making recommendations to the board from time to time on decisions that affect association finances. The treasurer should be familiar with all of the critical areas of financial responsibility, such as collection of assessments, paying bills in a timely fashion, liaison to the auditor and setting reserve limits. Outside of what responsibilities the board delegates, the treasurer should not be making financial decisions without obtaining board approval and should definitely not be doing the accounting, even if that is their chosen profession. It is important to preserve independent financial judgment. (Remember, the treasurer is not a professional money manager. A licensed professional should be consulted as to decisions regarding investments.)

Officers and directors: Overall, the rule governing officers and directors is that the "whole is only as great as the sum of its parts" and the "parts" are not permitted to engage in independent action unless specifically authorized by the board of directors. Each officer should have a defined job and a limited scope of authority. If each officer and the other directors have specific responsibilities and they carry them out in a timely fashion, the board will work very efficiently.

Remember, there is a distinction between officers and directors. The directors are elected by the members, and the officers are elected by the board. Directors should serve 2-year staggered terms; officers are elected annually. Directors must be removed by the owners as stated in the bylaws; officers can be removed (as officers) by a majority vote of the board.

No one director is any more powerful than any other, regardless of their title, and it is critical that everyone understand this.

• Jordan Shifrin is an attorney with Kovitz Shifrin Nesbit in Buffalo Grove. Send questions for the column to him at jshifrin@ksnlaw.com. This column is not a substitute for consultation with legal counsel. Past columns can be read at www.ksnlaw.net.